For many churches, fall is budgeting season. In the best case scenario, the process is excruciatingly boring. The worst case? Anxiety, conflict, and division. Budgeting may be necessary, but few clergy or laity enjoy it. Endure might be the more fitting word.
But ideally, the church budgeting process should be more than filling out numbers next to each line item. Budgets always tell a story. This year, invite your church’s leaders to zoom out from the line item budget and ask the following questions:
1. Who are we?
If you look at my personal bank or credit card statements, you will learn a lot about me. At what church do I worship and give? Where are my favorite places to eat? Who pays me to work for them? With all those purchases at the running store, you can probably guess my favorite hobby.
Likewise, you can learn a lot about a church by looking at the budget. First, review the income trends and sources. Are we a church with many faithful regular givers, or relying primarily on endowments? How often is the building being rented for weddings, parties, or community organizations?
Then evaluate the expenses. A church with an outsized portion of its budget going to the pastor often operates as a chapel—with worship, study, pastoral care, and little else. A program-centered church might have staff who direct different areas of ministry, and sizeable budgets for those areas. A missional church dedicates significant portions of the budget to serving the most vulnerable and engaging in outreach.
What truths do the current income and expenses reveal? Are you surprised by anything? Does it change your perceptions about the congregation?
2. What do we value?
I once served a church whose leaders loved to talk about how much they valued children and youth. They wanted to be a place for young families to learn and grow, and in many ways it was. But every year at budgeting time, hardly any money was set aside for children or youth ministries. It was assumed that those ministries could function and would grow with hardly any financial resources, a cadre of willing volunteers, and a can-do attitude. It couldn’t, and didn’t.
All churches, regardless of size, have limited resources. Come budgeting time, choices must be made about how to allocate what God has given us. Changes in allocation signify shifts in values.
When faced with the prospect of increasing or decreasing particular areas or line items, pause to reflect on why you are making the decision, and what it says about your congregation’s values.
3. Where are we going?
Budgeting is more than number crunching and good stewardship (though it is that). Budgeting is also vision casting—whether intentional or not. Making a budget for the upcoming year tells you where you are going as a congregation.
Perhaps you are substantially increasing the worship budget to make tech upgrades or add a second service. Reducing adult education costs might be the result of discontinuing a program that hasn’t been working well. Keeping the monthly meal ministry budget at the same level, despite declining income, signifies a commitment to feeding the hungry regardless of cost.
Pay attention to income trends here too. Who has started or stopped investing in the church’s ministry? While it’s important not to make decisions based on the whims of a subset of the congregation, noting these trends can give insight into where the congregation’s passions for ministry currently lie.
One of the most important lessons I’ve learned in ministry is that congregations cannot cut their way to growth. It is necessary, some years, to reduce the budget’s bottom line or hold it at current levels. But a pattern of annual cuts to the bottom line is not sustainable. A congregation that hasn’t raised its budget in 3 or more years (yes, including the pandemic) is on the path to decline, and further budget cuts will only hasten it.
Consider modest increases in the budget at least once every 2 years. Cast a vision with those increases—“Here’s where we believe God is calling us!” Then invite people to give by faith to that vision by telling the story of who you are, what you value, and where you are going.
How do you tell that story? Check out part 2 of this series: “Creating a Narrative Budget”.